Strategy Expands Bitcoin War Chest With $722 Million Upsized Preferred Stock Offering

Strategy MSTR, the company previously known as MicroStrategy, has significantly expanded its latest fundraising initiative, securing $722.5 million through a preferred stock sale aimed at fueling its Bitcoin investment strategy.

What Happened: The announcement, made Friday, revealed that the company priced 8.5 million shares of its 10% Series A Perpetual Preferred Stock at $85 each, marking an increase from its originally planned $500 million offering.

The deal, expected to close on March 25 pending standard regulatory clearance, will leave Strategy with approximately $711.2 million in net proceeds after fees and other expenses.

The firm noted the funds will primarily support corporate activities, including additional bitcoin acquisitions and working capital needs.

The newly issued preferred shares, listed under the STRF ticker, will yield a fixed annual dividend of 10% based on a $100 par value.

Dividends, if declared by Strategy’s board, will be paid quarterly beginning in June.

The offering terms also stipulate that unpaid dividends will accrue and compound at higher rates, potentially climbing to 18% annually.

In certain situations—such as when less than a quarter of the original shares remain outstanding, or if triggered by tax-related circumstances—Strategy retains the right to redeem the shares.

Holders can also request a buyback in the event of a significant corporate shift, with the company repurchasing shares at their face value plus any accumulated dividends.

A syndicate of leading financial firms, including Morgan Stanley MS, Barclays, Citigroup, and Moelis & Company, is managing the offering.

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Why It Matters: This latest capital raise complements Strategy's broader initiative to raise up to $42 billion for further bitcoin investments via a mix of preferred stock sales and debt offerings.

Earlier this month, the company disclosed a separate offering of perpetual preferred stock under the STRK symbol, part of a larger $21 billion program.

To date, it has sold $10.7 million worth of STRK shares, with roughly $21 billion still available for future issuance.

Earlier this week, Strategy also reported the purchase of an additional 130 Bitcoin for $10.7 million, acquired at an average price of $82,981 per coin.

This brings the company's bitcoin holdings to 499,226 BTC, valued at more than $41 billion at current market rates.

Strategy, under the leadership of co-founder and executive chairman Michael Saylor, has accumulated its Bitcoin trove at an average cost of approximately $66,360 per coin, with total investment costs surpassing $33 billion.

The company now controls nearly 2.4% of Bitcoin's maximum supply of 21 million coins.

Despite the bullish approach, Strategy’s $78.6 billion market capitalization continues to trade at a significant premium compared to its Bitcoin net asset value, sparking some investor concerns about the firm's aggressive and ongoing bitcoin accumulation strategy.

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